This is according to the Credit Suisse Emerging Markets Consumer Survey 2016, which showed that only 4% of respondents based in SA expect their personal finances to improve over the next six months, considerably lower than the 11% last year and well below the survey average of 16%.
The report was compiled by research firm Nielsen, which conducted nearly 16,000 face-to-face interviews across nine emerging economies, including South Africa.
Three in 10 respondents said they had no extra money for saving at the end of each month – this was down from 38% in the prior report, and also below the survey average of 32%.
For those who manage to save, they used the following distribution channels:
- Bank Account – 60%
- Life Insurance – 25%
- Stock market – less than 1%
- Cash – 28%
- Mutual Fund – 2.5%
- State Treasury bill-bond – less than 1%
- Property – 3.5%
“South African consumers face multiple challenges in 2016, with higher inflation due to severe drought conditions and a weak currency, as well as likely interest rate increases demanding higher shares of already constrained disposable incomes,” Credit Suisse said.
“The prospect of job cuts in the mining industry looms large, and will likely place further pressure on low-income households.”
“Mid- and higher-income households will likely face further interest rate hikes this year and, combined with currency weakness, constrain purchases of higher-end, often imported products.”
